 to finding your piece of the rock on ThinkTech Hawaii. I'm your host, Abe Lee. I have been a licensed real estate agent since 1973. I'm the owner of Century 21 Eye Properties Hawaii and work with close to 100 wonderful agents in real estate sales. I started Abe Lee seminars in 1980. I have taught over 10,000 students to help them to get their real estate licenses and teach continuing education to real estate licensees to maintain their license. Our show is dedicated to helping buyers and sellers understand the process involved in a real estate transaction. Our special guests will talk about legal issues, escrow, title, getting a loan, surveys, home inspections, insurance, contracts, rules and trusts and much, much more. And today we have a very special guest, a good friend of mine and a wonderful instructor and a broker and a broker in charge. So he wears many hats and his name is Elliot Lau. Elliot, thank you so much for taking time out of your busy schedule to be with us today. Good morning, hi Abe. Thank you for having me. It's an honor and good to see you. Yeah, same here. So we're gonna ask, tell us a little about your background. Where you grew up, your education, your work history and of course your grandmother who is the grandom of the Fong family. So we can't forget her. So tell us a little about your background. Abe and I go back a long ways. He knows my family. I'm born and raised in Honolulu, Hawaii and I am one of three, but my mother is one of 16 brothers and sisters. So my grandmother that Abe talked about is the matriarch, a gigantic family with deep roots in Hawaii. She's half Hawaiian and I grew up with 71st cousins. So born and raised here, I went to school at Punahou and then went on to BYU in Provo, Utah where I had great education, returned home after that and went in my, actually my career path was in the airline industry. I was always fascinated with airplanes and when I got a job with the airlines I loved it was made Pacific Airlines and those of you old enough to remember them they put the props to the neighbor islands and that was my career path. My father was always been broke with my whole life and he kept telling me I should get my real estate license and I had no interest in it but he kept saying you should have it, you should have it and I finally went to get my license, Moto appeased him, never intended to get it to real estate and I still remember in 1988, the day I got my back in those days it took two weeks for your, when you took the state exam you have to go to the mainland to get graded and you waited about two weeks for the results. The day that I got the letter in the mail saying I pass was the day that the airline I was working for went out of business. Mid Pacific Airlines filed for bankruptcy and that spawned a new career in real estate so that's kind of where my roots come from. Oh my goodness, I didn't realize that. The day you get your license, that's your warning sign that hey, you gotta get out the airlines in the street and I really remember Mid Pacific Airlines. They were about to start to Hawaiian Airlines and Aloha Airlines back then. Yeah. And I remember your father very well because he was a very accomplished broker and of course your mother was one of the fond girls, 16 children, can you imagine? And Elliot's grandma was only like four feet 10, just a tiny little lady but she had 16 children, amazing lady. So I have fond memories of her. So we go back more than just real estate. I mean, I've known the fond clan for really literally about 50 something years. Crazy, huh? Okay, so Elliot, now you did tell us how you got started in real estate so where did you go first with your license? It's funny, so I got my license and dad goes, I'm not gonna train you. So he sent me to Harita at the time. Harita had probably the best known or the best real estate training classes in Hawaii at the time. This was back in the 80s and I still remember my broker, Richard Fujiwara was my trainer. And at that time, you went through two or three weeks, full-time, five, I mean, eight hours a day, nine to five. And I still remember Richard's very first day. The first thing he told us in class, which I share still today to new agents that I train and teach is service your client and you'll have a long rewarding career. Chase the dollar and you're not gonna need it for long. And I still remember that. The first words of wisdom he shared and I still practice that today and train and coach that today still. So what happened after Harita? Where'd you go? And what did you do? Dr. Harita, great question. I had a great transaction with a broker of a small company and he hired me to be his sales manager. So after Harita, I went and joined him and I was probably there in the name of the company at Tenu, my pro source and Charlie was the broker. And we're still good friends today. And but I was there probably for about six or seven years and then I went to Mary Warren when it was still with close McCarter. So I was at Mary Warren, it was more Laurel and McCarter at the time and I was there for several years. And then I went on my own. Part of this by then it was during the Japanese bubble. So the market collapsed and when I got licensed I said I would never do property management ever. But back when the Japanese bubble collapsed, really if you want to still be in the business you kind of have to do property management. So I went on my own and I was doing a lot of property management at the time and at that point I was doing so much property management I say, you know, if I spend that much time in doing sales I'll make a lot more money. So I went back into sales, I was still on my own and that's when Brian Loughlin premier Realty 2000 contacted me and I joined him and we're together as partners for 22 years. And so fast forward, 22 years later after that I was given an opportunity to join Compass. Compass is a big brand, big company luxury broker on mainland and new to Hawaii. And so they hired me as their broker in charge on Oahu and that's where I'm at now. So that's been my career in a nutshell. Great. Now let's go back to Premiere because that's where the real estate school started. And I was the first teacher there and I knew Brian when he was in high school. So Brian and I go back many years and I was recruited by a guy named Mike Imanaka to come and be the premier or the first teacher. And of course you succeeded me and took over what now called INET. So tell us what happened in the pre-licensing portion because that's what I'd like to focus on for the next few minutes is what did you teach and what were the main things that you were trying to teach to your students? So great question. You know, my formal teaching for pre-license actually started in California. So after joining INET, I mean Premier Realty which then turned to INET. I went to California with Brian and I was doing some business development things there including teaching. So I was an instructor in California first. And so we were, they have similar courses. They're requirements that I think is 80 hours of classroom instruction. But what I would teach when I moved back here and started teaching pre-license on a walk-in, really I was teaching things at real estate concepts. By the way, going back to my BYU days I actually got my license in Utah back in the 70s. And so I keep forgetting that that's where my real estate career kind of started. But I since have long gone past Utah but I still remember real estate concepts was new to me when I first was introduced to it in Utah. This is the thing about real estate pre-license is that I keep telling agents on the first day of class that you're gonna be learning a new language. And many of the concepts are very conceptual and very hard to understand. And so I tried to blend the instruction with real life concepts. So understanding what real estate is and the concepts. And then I spent a lot of time on some of the bigger items that include agency, disclosure, state laws because they know that's what they're gonna test you on. A lot of my curriculum, it revolves around really passing the state exam and getting them prepared for that. Okay, so now when you're teaching because you're also practicing real estate. So you're selling as well as teaching, I'm assuming. Yeah. Okay, so now you're now in the field doing the things that you're teaching the students to follow, right? So which textbook did you use to be your guide? Well, principles and practices. When I got licensed back in the 80s, Pades Matusik was the author, co-author of the book, Principles and Practices of Hawaiian Real Estate, which really is a staple for Hawaii, which now you've taken over, you've succeeded in the revising and editing of the book because laws change all the time. But yeah, I've known principles and practices since the 80s and that's what I used to teach myself. Sean, you've taught hundreds of students through Inet and I noticed that you had a lot of five-star Yelp reviews and so you must be pretty good for them to have that many five-star Yelp reviews. But what were the main concepts that you were trying to teach to the agents as far as licensing and ethics were concerned? Well, that's a great question. You know, I believe that first of all, you've really got to interact and make the class interesting because when you think about it, it's not the most exciting dynamic subject matter to be teaching. So I think that making things a little more palatable, making it more fun, making it more interesting. I would always mix things in when I would teach a certain concept, like agency. Agency law is conceptual and boring and it confuses most people. When I then I try to involve real life scenarios, what this all means to get people to understand, ah, okay, now I'm taking something that's very conceptual to real life situations where people can relate to it. And I found that was quite the best way to get people to understand what you're teaching. Okay, so how long does it take to get a license? That's a great question. So the law, the Hoy State law is 60 hours. And we did it in four weeks in the beginning, but four weeks involved a full day on Saturday. So you're doing two weeknights and then all day Saturday. And it was tough, an all day class was tough for students. It's even tougher for the instructor. You know, teach to talk for eight hours. I know you still do that, Abe. I don't know how you do that. But man, after an eight hour day of teaching, you know, it's not like when you go to school for eight hours as a student, you go through, you go through eight different teachers for the eight different classes. This one, I mean, when you're an instructor of a real estate school, you're talking for eight hours and it's tough. And so we stretched it into a five week class where now we can do half days on Saturdays and get it in and, you know, I always thought four weeks is tough. You know, I was just talking to one of my each and sisters morning and when he got his license, he did it in five days, which is 12, five, 12 hour days. And I went, that's brutal. That's, I don't know how you can do it. Yeah, that's tough, that's tough. So now the students have to pass the school exam first and then what happens? Oh, you have to. So the requirements to apply for a real estate exam, you have to submit an application to the restate commission. In order to read the prerequisites for applying for a license, you have to show that you've passed the state exam, which is administered by a contracting company called PSI. In order to sit for that exam, you have to take and pass a class, which is yours and in my class, that's the 60 hour course. So working in backwards, you have to apply, you have to pass the state exam, to sit for the state exam, you have to take the class. So it starts with us and the classes and you have to pass your class first before you're allowed to sit for the state exam. So I understand that there's two parts to it, the state portion and the national portion. How many questions in each and what percent do you have to pass it with? So there's 80 questions for the uniform and there's 50 for the state and you have to pass each one at 70% passing rate for each. So the uniform covers the things that are uniform across pretty much all 50 states, things like tenure, methods of ownership, real estate principles. And then the state portion deals with state specific laws because every state has their own set of laws, which is why licenses aren't reciprocal because every state has different laws. So now you passed a school exam, like yours, and they passed a 70% passing rate. How long do they have to take the state exam? Great question. So from the time you get your certificate from the school that you've successfully passed, you have two years to complete or to sit for the state exam and pass that. However, I tell students, don't wait for two years because if you wait for two months, you will have forgotten all the information. I say you should be taking it, if they allowed you, you should be taking it two hours after you get the state of the school certificate because you only start to forget things. And the longer you go, people think that I'm gonna spend a little time to study a little more and wait. If you were studied by now, you're not gonna find the time to take the exam. So now you took the school exam, you passed it, and you have two years to take the state exam, you take the state exam, and then how long do you have to actually do something with this license that you can get? You don't get a license by passing the state exam, but you have the right to get a license. So how long do you have to get something with that test that you passed? That's a good question. People think that once they pass the state exam, they're licensed, they're legal to practice real estate. No, that's just the next step in your whole journey is once you pass the state exam, now you have to make application to the state for a license. So the state exam is just one of the prerequisites. You actually have to apply to the state, and you have two years from the time you pass the state exam to apply for your license. Just because you've passed the state exam doesn't guarantee, right? There's about 10 or 12 questions on your application that you have to answer, and basically they're all questions relating to your character. And if you, you know, because that's what the law requires, you have to be of good character, not just pass the exam. So you could pass the state exam and not be, not able to get a license because of some things that happened in the past. So now, people ask me, well, I want to get into commercial real estate or residential real estate or something else. Do I have to have a separate license for those different categories? So how does a state of Hawaii license work? What can you do with your license? So a state license, once you receive the license from the real estate commission that says you are licensed to practice real estate, you are not licensed to practice anything that's real estate related, commercial or residential, as well as practice anywhere in state Hawaii, not just on, you know, if you take your class and test on Oahu, you can practice your legal to practice on all islands. But that whole saying goes, just because you can doesn't mean you should. And that's true. So I understand too, that you can do actually property management or timeshare, residential and commercial. I guess those are the four basic areas where you could exercise your license. Yeah. Yeah, and so, but, you know, the courts and the law still holds you to a standard of competence and expertise. So just because you're licensed to practice any form of real estate, the law will still say you still have to have competence in doing that. So how would you go about once your students have passed the test and they say, Elliot, who's gonna hire me? Now what do you tell them to do? That's a good question. So usually at some point during my class when you're getting their license, I spend them on an hour. I just take a break from studying real estate and give them an idea what they're getting into because I joke with all my students in every class. I said, you know, in two or three weeks, you're gonna be licensed to practice real estate. And this is what all newly licensed real estate agents look like, because it's so true. I now have a license, what do I do with it? All right, so I used to go through, I say, here are 10 questions to interview your real estate broker, because these are questions that you need to know. You know, in this business, there's a really high failure rate. And I think a lot of it is people don't know what they're getting into, what is involved in being successful as business. You know, if there's very few other careers you can go into that you can spend so little money and so little time and make a seven-figure income. But by that same token, most people won't and it's because they don't understand what they're getting into and what it takes to make it as business. And really it starts with having the right broker. So how would you go about interviewing? Cause you got residential brokers and then you got commercial brokers and sometimes they don't cross over, do they? No, and it rarely do they cross over. The residential is typically where most agents start into unless you have some kind of a kickstart in commercial. Most commercial brokers don't want new agents. Most, there are exceptions, but they're very different in the nature. You know, when you think about residential or real estate, residential is really real estate that's for habitation, right? And that's really encompasses all residential real estate is real estate that's meant for habitation. Commercial real estate is everything else. So it is so broad and diverse. There are a lot of specialties that are involved with it. And so residential real estate is generally the, I shouldn't say easier road cause it is not easy. There is nothing easy about either one, but I think it's the one residential is much, you're much more likely to get up and running much quicker because you're helping people buy homes and that's very relatable to most people. Commercial is a whole different animal all together. Okay, so now the agents have come to you and you were at Inet and what was your responsibility at Inet? At Inet, I was the broker in charge and so the broker in charge by real estate law is the person that's one of the people responsible for the conduct and actions of all your agents. So we spend a lot of time on trading. I enjoyed training, teaching agents how to be successful in the business, but also how to oversee and keep them out of trouble because although you're responsible for all your agents and their real estate activities, you cannot mandate that they attend training or sales meetings or anything else. And so you have to walk this fine line of really having your agents competent and trained to do this job. And when you think about it, you're dealing with a lot of money, right? I mean, even what we call today a small deal, right? A $250,000 deal. I keep having to remind agents, I don't know what world $250,000 is a small sum of money. Yeah, really. And now the average price or medium price of a condo is like 500 grand and the house is over a million, which is crazy. When you and I started, we never had no idea you'd ever get that high, right? Yeah, no, not in a million years. So, Elliot, we're running out of time, unfortunately. I'd like to have you come back and talk about the contents of the course and how it would help the consumer because really what you're teaching the student, the agent to do is how to treat the clients so there's no lawsuits and there's proper disclosures and everything is being done correctly and ethically. So we have a lot more things that I would love to have you come back and talk about because of your years of experience in both teaching and also managing and supervising. So what advice would you give in the last minute or two about a person that wants to think about going into real estate as a career, part-time, full-time, or whatever? I think my advice is to really understand what you're getting into. There's kind of a joke about, people see real estate agents, they dress well, they drive nice cars, they live in nice homes and it's such an easy job. They sit in an open house and they make millions and millions of dollars doing this. Okay, that's kind of akin to when you watch, NFL is going on right now, right? And then you watch these professional football players that make obscene amounts of money and you think, wow, that'd be so great to have that career. But what people don't see is all of the preparation it takes in the background, how much training, how much working out, same thing with real estate. And you be successful in it? Yes, but you have to be aware of what it takes. You can make a lot of money in this business, just understand what you're getting into. You're gonna have to do things that take you out of your comfort zone. You have to talk to strangers, you have to have conversations with people. These are things that some people just can't get past. Picking up the phone and calling people you don't know. These are scary things for a lot of people but that's really the most successful agents do that the best and do it the most. And then I can't tell you, thank you so much. And we're just touching the tip of the iceberg. Now you talked about the school, what I'd like to do the next time is talk about the course content a little bit but then also how it relates from the agent to the consumer and the fiduciary responsibilities that the agent has and how big a response to me that is. Because a lot of people don't think about that. So thank you so much, folks. If you enjoyed the show, please go on to it. It's gonna be broadcast and it'll be on the Think Tech Kauai archives. So just look up Elliott Lau and then we should have the video and please tell your friends about it. And if you have any interest about the real estate schools, I do have ablyseminars.com where you can get information on the pre-licensing school and the process to get a license. So Elliott, thank you so much. I really appreciate your time. We'll see you one more time at least.